Apple's iPad 2 launch in China draws crowds, scalpers

Apple's launch of the Wi-Fi iPad 2 in China on Friday drew customers and scalpers alike, with anecdotal evidence suggesting that the white model is significantly more popular.

The iPad 2 went on sale at Apple Stores in China at 8 a.m. Friday. The touchscreen tablet also launched on the China Apple Online Store, which was taken down early Friday and returned with an iPad 2 shipping estimate of one to two weeks.

At the Cupertino, Calif., company's flagship store in Beijing, the line still numbered in the hundreds by 10 a.m. local time. Apple retail staff carefully managed the line, allowing just a handful of customers in at a time. Dozens of scalpers congregated outside the retail store, offering to sell the device, which starts at 3688 yuan ($568), for a markup of just 200 yuan ($30).

The launch drew noticeably more customers than last year's launch of the original iPad. However, weather may have played a part, as last year's launch was rained out.

Line for the iPad 2 at Apple's flagship Beijing Sanlitun store

This year, Apple retail staff put in place more organized rules for customers choosing to wait overnight and provided a waiting room and numbered wristbands. The first customers reportedly began arriving at 5 p.m. the day before.

"If you leave the queue, an Apple staff member will take your wristband. If you return within one hour, it will be given back to you. If you return more than one hour later, you will be given a new wristband for a different place in line," one sign detailing the new rules read.

Waiting rules for iPad 2 launch

An informal exit survey of customers appeared to indicate that the white iPad 2 was more popular than the black model. Also, remaining inventory stored behind the Apple Store cash register was skewed heavily toward the black model, though the proportion of black to white iPads that Apple started the day with remains unclear.

iPad 2 inventory (black models, left; white models, center)

White versions of Apple's products have proved popular in China in the past. Analyst Brian White with Ticonderoga Securities said last month that China was "a prime candidate for a 'white' iPhone 4." The white iPhone 4 quickly sold out in mainland China when it was released there late last month.

Apple has made an effort to shorten the gap between the U.S. and China releases of its major products. The first-generation iPad took four months to officially arrive in China, while the iPhone 4 saw a two month delay and the iPad 2 launched less than two months after the U.S. release.

China's thriving grey market may have motivated the company to more quickly release its products in the region. Last year, rampant scalping outside of Apple's stores in China resulted in a scuffle between customers and grey market resellers.

Perched upon a stack of iPad 2s, a scalper accepts a credit card outside the Sanlitun Apple Store

During its quarterly earnings call last month, the company indicated that its China strategy would serve as a model for similar emerging markets. Apple has been "on a tear" in China, with overall sales reaching just under $5 billion, roughly 10 percent of total revenues, in the first half of fiscal 2011.

The white models were definitely more popular in Hong Kong. Which was just fine by me. I've posted this on my black 64GB wi-fi iPad 2, which, conveniently, was the only model available a week after the release here. I went to six stores on Wednesday afternoon to find an iPad 2, and luckily found the exact one I wanted.

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?
Is Apple condoning scalping in China? Doesn't Apple have a policy that each person can only buy one iPad? We do have a policy in the US while every one can at most buy two iPhones. It seems the Apple management is keeping one eye shut. I am not foolish enough to let myself be scalped, and I can wait 1 to 2 weeks for my iPad to arrive if they don't have any in stock. Hopefully they will do something productive with their iPads (i.e. read) instead of playing games all the time.

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?
Is Apple condoning scalping in China? Doesn't Apple have a policy that each person can only buy one iPad? We do have a policy in the US while every one can at most buy two iPhones. It seems the Apple management is keeping one eye shut. I am not foolish enough to let myself be scalped, and I can wait 1 to 2 weeks for my iPad to arrive if they don't have any in stock. Hopefully they will do something productive with their iPads (i.e. read) instead of playing games all the time.

It's not like scalpers go in and buy a dozen iPads. They stand in line and wait like everybody else, and are rewarded $30 for their patience and time. If I were a rich sweat shop owner in china i wouldn't want wait in line like all the rest of society, i would have the money to pay some scalper to stand in line and get me an ipad or two.

It's not like scalpers go in and buy a dozen iPads. They stand in line and wait like everybody else, and are rewarded $30 for their patience and time. If I were a rich sweat shop owner in china i wouldn't want wait in line like all the rest of society, i would have the money to pay some scalper to stand in line and get me an ipad or two.

You would enjoy living in the developing world then. Unless of course, you're the sweat shop employee, not the owner.

The white models were definitely more popular in Hong Kong. Which was just fine by me. I've posted this on my black 64GB wi-fi iPad 2, which, conveniently, was the only model available a week after the release here. I went to six stores on Wednesday afternoon to find an iPad 2, and luckily found the exact one I wanted.

Just wondering - where did you pick one up in HK? I have a 64GB iPad on order from the online store but don't think I can't wait another week and a bit for delivery!!!

Look at all those extras Apple hired to fool the media into believing they're real customers. Haha.

It appears as though only a FEW Apple fanbois in China turned out to buy an iPad 2. I'll bet the stock sold out in a few hours at most. Since analysts are now using consumer store visits to value Apple's share price maybe this picture will boost the value a tad. I hope Apple sells the living crap out of iPads this year. I won't settle for less than 50 million units and that should put a nice twist in Microsoft's and Ballmer's knickers. I'd like to be there when Ballmer is asked if the iPad has affected Windows sales and revenue and he just hurriedly says "Next question."

Just wondering - where did you pick one up in HK? I have a 64GB iPad on order from the online store but don't think I can't wait another week and a bit for delivery!!!

Well, originally I went to Bank Centre Broadway in Mong Kok on launch day, and waited in line (after first going to Ultimate in Central where they told the people who had waited in line for more than an hour that they were sold out -- even before they opened the shop!!! ). I would have got one, but had left my credit card at home (DOH!).

Then on Wednesday, I went to Mongkok again, and every shop was sold out... except one. The guy at New Vision₂ told me that they had received the first shipment on Friday and then another shipment on Saturday, and then -- nothing. Suning (formerly Citicall) next to the same Broadway said they only had one model available. I held my breath and asked which one, and he said... 64Gig. Wifi. Black! The EXACT model I wanted.

Only one caveat. They made me buy a Tunewear case for HK$399. They wouldn't sell it to me without buying the Tunewear case. It's a nice case, but I wouldn't have bought it if I didn't have to.

[QUOTE=IronTed;1859917]This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?

IronTed, your post is spot on. In every way.

1/ when apple stores in china had the problem with scalping last year and the year before they began to require ID and everyone could buy either one or two depending on the item and time.
they have changed their policy and there is no limit now.

2/ iPhone 4 in HK sold out within an hour or so at authorised retailers and with scalpers from guangdong ferrying iPads and iPhones back to china it is creating a frustrating situation for regular customers

the apple people in charge of china do not know how to grow their brand in china. apple in china is allowing itself to be a boom to bust brand if it isnt able to get the product into a more reasonable distribution pattern.

there is a coming backlash to be caused by incorrect supply chain and market expansion decisions.
if apple's supply chain cant handle the stress (and opportunity) afforded by china currently, then it should not be launching products there yet. there are so many other markets that should be given priority to grow share in. you mention one: japan. but there are many other international markets where market share can be gained now before others get a chance to catch up.

china is not interested in apple. china is interested in what is hot currently. growing a brand in china is more difficult and apple will learn it the hard way.

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?

IronTed, your post is spot on. In every way.

1/ when apple stores in china had the problem with scalping last year and the year before they began to require ID and everyone could buy either one or two depending on the item and time.
they have changed their policy and there is no limit now.

2/ iPhone 4 in HK sold out within an hour or so at authorised retailers and with scalpers from guangdong ferrying iPads and iPhones back to china it is creating a frustrating situation for regular customers

the apple people in charge of china do not know how to grow their brand in china. apple in china is allowing itself to be a boom to bust brand if it isnt able to get the product into a more reasonable distribution pattern.

there is a coming backlash to be caused by incorrect supply chain and market expansion decisions.
if apple's supply chain cant handle the stress (and opportunity) afforded by china currently, then it should not be launching products there yet. there are so many other markets that should be given priority to grow share in. you mention one: japan. but there are many other international markets where market share can be gained now before others get a chance to catch up.

china is not interested in apple. china is interested in what is hot currently. growing a brand in china is more difficult and apple will learn it the hard way.

The meta message from your post is more interesting than the opinion you present. That is, an example of the deep-seated animosity many Japanese hold toward China.

1/ when apple stores in china had the problem with scalping last year and the year before they began to require ID and everyone could buy either one or two depending on the item and time.
they have changed their policy and there is no limit now.

2/ iPhone 4 in HK sold out within an hour or so at authorised retailers and with scalpers from guangdong ferrying iPads and iPhones back to china it is creating a frustrating situation for regular customers

the apple people in charge of china do not know how to grow their brand in china. apple in china is allowing itself to be a boom to bust brand if it isnt able to get the product into a more reasonable distribution pattern.

there is a coming backlash to be caused by incorrect supply chain and market expansion decisions.
if apple's supply chain cant handle the stress (and opportunity) afforded by china currently, then it should not be launching products there yet. there are so many other markets that should be given priority to grow share in. you mention one: japan. but there are many other international markets where market share can be gained now before others get a chance to catch up.

china is not interested in apple. china is interested in what is hot currently. growing a brand in china is more difficult and apple will learn it the hard way.

My experience in Hong Kong was totally different than what you're claiming here.

On launch day, I went to the Ultimate PC and Mac Gallery on Des Voeux Rd. in Central/Sheung Wan, where there were about 30 people in front of me in line. The staff immediately told every one of us that there was a limit of ONE iPad per customer. Then, 30 minutes later, they told us all, including all those in front of us, that they were sold out -- even before they had opened the shop at 10am.

Then, my second destination was Mong Kok. I had considered going to DG in IFC, but after my experience with Ultimate I (wisely, I'm sure) decided not to try another shop in Central/Hong Kong Island. So I went to Mong Kok, where there were at least 4 or 5 completely different dealers getting launch units within walking distance.

So I went to Broadway first, since it's right outside of the MTR station.

I got in line at about 9:40am, with about 20 people ahead of me in line, expecting the shop to open at 10am, as posted on the Apple site. Staff as the shop assured us that there were plenty available. There was also a limit of 2 per person in line. They didn't start selling the iPad until 11am. And as soon as they sold out of any model, they let everyone in line know with a status board. The first to sell out were a few of the white 3G models.

I honestly didn't see anyone who I would think was a scalper in line. The few people I spoke with were obviously excited about getting iPads for themselves.

It honestly seemed like the reason it's so hard to find them in Hong Kong is because so many people in Hong Kong can afford them, and because so many people in Hong Kong genuinely want them.

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?
Is Apple condoning scalping in China? Doesn't Apple have a policy that each person can only buy one iPad? We do have a policy in the US while every one can at most buy two iPhones. It seems the Apple management is keeping one eye shut. I am not foolish enough to let myself be scalped, and I can wait 1 to 2 weeks for my iPad to arrive if they don't have any in stock. Hopefully they will do something productive with their iPads (i.e. read) instead of playing games all the time.

Scalping is normal in Japan: for sports events, popular concerts tickets etc

What this shows is that, Apple needs to open a lot more Apple stores in China.
Now with just 2 store in Beijing and 2 stores in Shanghai are not enough.

Brands like LV, Gucci, and Coach etc, have more store in China than Apple has.

Apple seems to always place more inventory available in the US first. That is why the wait for the iPad is shorter in the US.
The long wait in China is due to Apple's inability to stock up in China. Apple should divert more inventory to China in the future.

It does seem kind of odd, given that they are made ("assembled") in China (maybe even in Shenzhen, right by Hong Kong). I guess it must be a choice rather than a logistical issue.

Apple just cannot make enough products to go around the world. So the choice is to stock the channel in North American first, then Europe and Japan.

But it is clear that, Apple sales in the Greater China region is surging rapidly. However, Foxconn has to deal with rapidly rising wages in China, as well as surging demand for Apple products at the same time.

Well, originally I went to Bank Centre Broadway in Mong Kok on launch day, and waited in line (after first going to Ultimate in Central where they told the people who had waited in line for more than an hour that they were sold out -- even before they opened the shop!!! ). I would have got one, but had left my credit card at home (DOH!).

Then on Wednesday, I went to Mongkok again, and every shop was sold out... except one. The guy at New Vision₂ told me that they had received the first shipment on Friday and then another shipment on Saturday, and then -- nothing. Suning (formerly Citicall) next to the same Broadway said they only had one model available. I held my breath and asked which one, and he said... 64Gig. Wifi. Black! The EXACT model I wanted.

Only one caveat. They made me buy a Tunewear case for HK$399. They wouldn't sell it to me without buying the Tunewear case. It's a nice case, but I wouldn't have bought it if I didn't have to.

Maybe this unscrupulous tactic should be reported to Apple.

Thanks for this. I may have to head up to Mongkok next week at some point, and see if I'm in Lady Luck good books!

Yes, that case thing is rather naughty, but I am glad you got the device you were looking for!

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?

You're very funny. Where does the U.S. stand in your estimation of scalping? Remember the Wii, or any other hot product, including iPhones and iPads, when they were first released? You couldn't find any in the stores, but there were hundreds for sale on eBay for double the price or more. Or don't you consider that scalping?

How about when there's a flood or other emergency, and the stores sell food for 5 times the price? How about the people that ran all the scams after Hurricane Katrina and the World Trade Center bombing?

Welcome to the First World - scalpers, scammers and spammers. (Adding $30 to the price of an iPad is pretty mild, actually).

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?
Is Apple condoning scalping in China? Doesn't Apple have a policy that each person can only buy one iPad? We do have a policy in the US while every one can at most buy two iPhones. It seems the Apple management is keeping one eye shut. I am not foolish enough to let myself be scalped, and I can wait 1 to 2 weeks for my iPad to arrive if they don't have any in stock. Hopefully they will do something productive with their iPads (i.e. read) instead of playing games all the time.

Where did you hear Apple is not limiting purchases? I went to the Apple China website and they limit you to 2 iPads.

This is truly disgusting! This proves why China is still behaving like a Third World Country while they are going on their way to becoma a First World Country? Ever heard of scalping in Japan?

IronTed, your post is spot on. In every way.
...
the apple people in charge of china do not know how to grow their brand in china. apple in china is allowing itself to be a boom to bust brand if it isnt able to get the product into a more reasonable distribution pattern.

there is a coming backlash to be caused by incorrect supply chain and market expansion decisions.
if apple's supply chain cant handle the stress (and opportunity) afforded by china currently, then it should not be launching products there yet. there are so many other markets that should be given priority to grow share in. you mention one: japan. but there are many other international markets where market share can be gained now before others get a chance to catch up.

china is not interested in apple. china is interested in what is hot currently. growing a brand in china is more difficult and apple will learn it the hard way.

So, your proposal would be that Apple not sell in China? Rather, you'd have gray marketeers buy iPads in New York, San Fran, HK and elsewhere and bring them in? While the Japan and other markets are important, I'd wager that Apple feels that the China market is probably the 2nd most important globally behind the US.

Man, I don't know how you last in Hong Kong. I hear people are rude, unscrupulous, all out just for money, etc. They have some of the worst traits of non-Westernised ethnic Chinese, from what I hear.

At least the ethnic Chinese here in South East Asia may be quite money-minded, but not as bad as Hong Kong.

I'm half ethnic Chinese, I know about some of our less appealing traits.

Quote:

Originally Posted by tonton

Well, originally I went to Bank Centre Broadway in Mong Kok on launch day, and waited in line (after first going to Ultimate in Central where they told the people who had waited in line for more than an hour that they were sold out -- even before they opened the shop!!! ). I would have got one, but had left my credit card at home (DOH!).

Then on Wednesday, I went to Mongkok again, and every shop was sold out... except one. The guy at New Vision₂ told me that they had received the first shipment on Friday and then another shipment on Saturday, and then -- nothing. Suning (formerly Citicall) next to the same Broadway said they only had one model available. I held my breath and asked which one, and he said... 64Gig. Wifi. Black! The EXACT model I wanted.

Only one caveat. They made me buy a Tunewear case for HK$399. They wouldn't sell it to me without buying the Tunewear case. It's a nice case, but I wouldn't have bought it if I didn't have to.

Man, I don't know how you last in Hong Kong. I hear people are rude, unscrupulous, all out just for money, etc. They have some of the worst traits of non-Westernised ethnic Chinese, from what I hear.

At least the ethnic Chinese here in South East Asia may be quite money-minded, but not as bad as Hong Kong.

I'm half ethnic Chinese, I know about some of our less appealing traits.

I've never been in any society where no one is rude, unscrupulous or out for money. I've also never been in any society where everyone is rude, unscrupulous and out for money. The skill is in knowing how to pick your friends, and how to deal with everybody else.

I've got plenty of friends here in Hong Kong who are not rude, not unscrupulous, and not out for money. So I get along.

Man, I don't know how you last in Hong Kong. I hear people are rude, unscrupulous, all out just for money, etc. They have some of the worst traits of non-Westernised ethnic Chinese, from what I hear.

At least the ethnic Chinese here in South East Asia may be quite money-minded, but not as bad as Hong Kong.

I'm half ethnic Chinese, I know about some of our less appealing traits.

Have you ever lived in Hong Kong?
Hong Kong Chinese are some of the nicest people I have ever met. They are so polite and well-behaved. They are well educated and know to appreciate fine products. They are so well-cultured, I would say they are better than the south east Asia Chinese.
But South east Asia Chinese have their nice aspects.

If you don't post it, the Chinese will light up. You do know that China is the last great frontier for cigarette mfrs, right?

From May 1st China has implemented a no smoking ban in public places. It's good to see Apple highlighting this as awareness of the ban is low and enforcement will be down to the actions of shops, restaurants etc.

1/ when apple stores in china had the problem with scalping last year and the year before they began to require ID and everyone could buy either one or two depending on the item and time.
they have changed their policy and there is no limit now.

2/ iPhone 4 in HK sold out within an hour or so at authorised retailers and with scalpers from guangdong ferrying iPads and iPhones back to china it is creating a frustrating situation for regular customers

the apple people in charge of china do not know how to grow their brand in china. apple in china is allowing itself to be a boom to bust brand if it isnt able to get the product into a more reasonable distribution pattern.

there is a coming backlash to be caused by incorrect supply chain and market expansion decisions.
if apple's supply chain cant handle the stress (and opportunity) afforded by china currently, then it should not be launching products there yet. there are so many other markets that should be given priority to grow share in. you mention one: japan. but there are many other international markets where market share can be gained now before others get a chance to catch up.

china is not interested in apple. china is interested in what is hot currently. growing a brand in china is more difficult and apple will learn it the hard way.

Quote:

Originally Posted by Robin Huber

The meta message from your post is more interesting than the opinion you present. That is, an example of the deep-seated animosity many Japanese hold toward China.

I don't think niji's post could be deemed to be an example of "deep-seated animosity" the Japanese hold towards the Chinese, even if it exists.

Let's just say mainland Chinese and people from Hong Kong have a reputation for being out just to make a quick buck any way they can. And this perception is shared by ethnic Chinese and other races in various countries. To what extent this is true or not, I leave to the sociologists.

Country and racial issues aside, niji has an interesting point, if people in China start getting bored of Apple then the brand will suffer. However, there is a universal appeal of Apple gear that will last beyond just being the latest fad. The iPad 2 is super popular because in Asia, well, you just gotta have one... But it is still generally a superior tablet to anything else out there. The Chinese would be able to appreciate that, beyond the hype of just getting one. Some may be pissed off when they realise it can't run Flash and MS Office (I'm sure this happens around the world) but workarounds exist.

Have you ever lived in Hong Kong?
Hong Kong Chinese are some of the nicest people I have ever met. They are so polite and well-behaved. They are well educated and know to appreciate fine products. They are so well-cultured, I would say they are better than the south east Asia Chinese.
But South east Asia Chinese have their nice aspects.

To be honest I haven't visited or lived in Hong Kong. Only Malaysia, Singapore, a few Australian cities, US, and the briefly the UK and some European countries. I only have the information from South East Asian Chinese to go on at this stage, and personal experience from encounters with immigrants from China and Hong Kong in the places I've been to.

Quote:

Originally Posted by tonton

I've never been in any society where no one is rude, unscrupulous or out for money. I've also never been in any society where everyone is rude, unscrupulous and out for money. The skill is in knowing how to pick your friends, and how to deal with everybody else.

I've got plenty of friends here in Hong Kong who are not rude, not unscrupulous, and not out for money. So I get along.

Well, you seem to be quite forgiving... I don't know many people who would be willing to be forced to buy a case just to get the latest iPad.